“Quarterly earnings guidance often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability,” they said.

The two men are among the financial industry’s most powerful leaders. They have said the practice of telling Wall Street what to expect from earnings can distort management’s priorities. In the latest appeal, they said companies often hesitate to spend on technology, hiring, and research and development to meet quarterly earnings forecasts that can be affected by seasonal factors beyond their control.

Dimon has blasted excessive reporting requirements and the short-term focus of quarterly earnings. At JPMorgan’s investor day in February, he called on companies to stop providing the guidance, saying earnings are hard to predict and companies have an incentive to fudge numbers. Buffett has echoed the idea that guidance can lead to corporate misbehavior.

Discouraged Listings

In the op-ed, Dimon and Buffett said the pressure to meet short-term earnings estimates has contributed to a drop in the number of public companies in the U.S. in the past two decades. “Short-term-oriented capital markets have discouraged companies with a longer-term view from going public at all, depriving the economy of innovation and opportunity,” they said.

Dimon, Buffett and BlackRock’s Laurence D. Fink urged companies in 2016 to refrain from short-term earnings forecasts in a letter and report with other financial industry executives. They offered “common-sense” recommendations for public companies to improve governance and relations with shareholders.

Earnings guidance can lead management teams to under-invest in the future and can crimp earnings growth, according to a 2017 FCLTGlobal report. Bloomberg LP, the parent of Bloomberg News, is a member of the Boston-based non-profit group.

The report found fewer than a third of S&P 500 companies still issued quarterly guidance in 2016, down from 36% in 2010. About 31% gave annual earnings-per-share guidance. Companies including Unilever, Facebook, GlaxoSmithKline and BP have scrapped the practice in favor of multiyear outlooks, according to the report.

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